Termination of employment

The employment relationship can be terminated in several ways. Each of these gives rise to rights and obligations for both the employer and the employee. The methods of termination of employment are:

• agreement
• Testimony
• immediate cancellation
• cancellation during the probationary period

The fixed-term employment relationship then ends at the end of that period. However, the employer must give the employee at least 3 days’ notice of termination before the expiry of this period.

Agreement

The Labour Code states that if the employer and employee agree to terminate the employment relationship, the employment relationship ends on the agreed date. However, the termination agreement must be in writing and both parties must receive a copy of the termination agreement.

Testimony

An employer may only give notice to an employee for reasons that are expressly stated in Section 52 of the Labour Code. In any case, however, the employer must give the notice to the employee in writing and must still deliver it to the employee physically, although an amendment to the law is already being drafted that would allow notices to be signed and delivered electronically if the employee consents.

Unlike an employer, an employee can give notice for any reason. The notice can also be revoked, but both parties must agree in writing.

The employment relationship shall be deemed terminated on the expiry of a notice period of at least 2 months, except as provided for in Section 51a. The notice period begins on the first day of the calendar month following the delivery of the notice and ends on the last day of the relevant calendar month.

It is also important to mention that an employer cannot give notice to an employee if the employee is in a so-called “termination of employment”. protection time. This category includes, for example, employees who are temporarily unable to work.

Immediate cancellation

The employment relationship can only be terminated immediately in exceptional cases. The employer may take this step if the employee has been finally convicted of a deliberate criminal offence and sentenced to an unconditional prison term of more than 1 year, or if the employee has been finally convicted of a deliberate criminal offence committed in the course of or in direct connection with the performance of his/her work duties and sentenced to an unconditional prison term of at least 6 months. The second situation is a gross breach of the employee’s obligations under the law.

On the other hand, an employee may immediately terminate his/her relationship if, according to a medical opinion, he/she is unable to perform his/her work without serious risk to his/her health. At the same time, the employer did not find him another job within 15 days that matched his condition. The second situation is when the employer fails to pay the employee’s wages within 15 days after they are due.

If the employee terminates the employment relationship immediately, he/she is entitled to a wage or salary replacement equal to the average earnings for a period corresponding to the length of the notice period.

Cancellation during probationary period

The last method of termination of employment is termination during the probationary period. In this case, the employer does not have to give any reason. However, they may not terminate the employee during the first 14 calendar days of the employee’s temporary disability.

What about mass layoffs?

A collective redundancy is a situation where the employer terminates the employment relationship within a period of at least 30 calendar days:

• 10 employees of an employer employing between 20 and 100 employees
• 10 % of employees in employers with between 101 and 300 employees
• 30 employees of an employer with more than 300 employees

The employer is obliged to inform the trade union and the works council of this decision in writing in good time and at least 30 days in advance. At the same time, it must also state the reasons and other requirements set out in Section 62 of the Labour Code.

Severance pay for employees

The Labour Code also defines the key to an employee’s entitlement to severance pay. Specifically, he is entitled to severance pay of at least:

• one times his average earnings if his employment with the employer lasted less than one year
• twice his average earnings if his employment with the employer lasted at least 1 year and less than 2 years
• three times his average earnings if his employment with the employer lasted at least 2 years
• the sum of three times the employee’s average earnings and the amounts referred to in points 1 to 3 if the employment relationship is terminated at a time when the employee is subject to the procedure under section 86(4) in the working time account

Employer’s obligations after termination of employment

If an employer decides to make redundancies, it must take into account the obligations arising from this. Among other things, employees must issue:

• Confirmation of employment
• Confirmation of taxable income
• Confirmation of entitlement to unemployment benefit
• Work activity report
• Pension insurance record sheet

Keep everything under control

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